How do bad credit car loans work?

My credit is honestly terrible. I maxed out a few too many credit cards and now I’m working on building my score back up. But I really need a new car. How do bad credit car loans work?

Answer
I’m glad to hear that you’re putting in the effort to fix your credit. It will make things much easier in the long run!
Luckily, you can still get a car loan with bad credit. However, it is a bit more difficult to get approved, and it will certainly be more expensive.
Bad credit car loans generally come with higher APRs. The APR includes the loan’s interest rate and additional fees. In your situation, you may see APRs as high as 20%. Meanwhile, someone with a great credit score may qualify for a 0% to 3% APR loan.
Although a high APR is pretty much unavoidable with a low credit score, you can always make a large down payment on the vehicle, which will lower the amount of money you have to borrow in the first place. You could also consider having a family member or friend with a high credit score cosign on the loan. This would improve your odds of getting approved for a loan and may even qualify you for a lower interest rate.
After making several on-time loan payments and improving your credit score, be sure to check out the Jerry app to refinance your loan and save on monthly payments.
Jerry removes the hassle by giving you one app that instantly connects you with top companies to meet your financial needs. Make sure you’re not overpaying for your car loan by comparing offers from multiple lenders to find the best option for you.
Chloe Jenkins
Answered on Nov 17, 2021
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